Tag: Public Banks

In a blog post this summer, we assessed the history of U.S. public banks over three centuries. We concluded that, “The best way to ensure that financial intermediation advances social welfare is to define a carefully-constrained charter, mandate transparent limits on self-dealing up front, and ensure that the bank is fit for purpose under reasonable rules that ensure long-term profit in concert with effective public service. Public subsidies to support public service make sense, but only when sufficient regulation and private-sector discipline constrain the natural self-serving instincts of all-too-many politicians.” Maybe so, but sizeable minorities of voters this November said that they so distrust private banks that they want a public alternative no matter the controls that might apply. In a blue-wave mood, federal legislators are listening. Continue reading “Public Banking Under a Blue Wave”→

“Public” banks have been touted since before the U.S. Revolution as a remedy for a variety of common financial ailments, most recently as a cure for private banking’s presumed indifference to public purpose in order to protect personal profit. The 21st-Century Equality Bank wepreviously outlinedis one way to align a bank’s private interest with public purpose without public subsidy. Is it enough or are public banks also required? The public-bank scorecard documents several centuries of well-intentioned financial institutions brought down due to immunity from effective regulation and a lack of market discipline. Given the renewed interest in public banks, will this time be different? We doubt it. Continue reading “Public or Perish? The Future of Public Banking”→